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Free market anti-globalism
keda
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Posted 12/19/08 - 04:11 AM:
Subject: Free market anti-globalism
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#1
Wherever I go, free market seems to be taken to be connected with globalism. I am myself opposed to globalism yet advocate a free market, and have my reasons for doing so and find it hard to grasp why other free-marketters be for globalism, so can anyone explain why this is the case?
While I'm not against globalism in general i.e. I don't think it is inherently wrong, I am against the current trend of globalism, since it harms people (workers and local business) who were never asked to participate in trade agreements not to mention that the trade agreements are not free trade but managed trade, and thirdly trading with countries that are less free causes outsourcing and lowers the economic freedom to the lowest common denominator so to speak.

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swstephe
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Posted 12/19/08 - 06:14 AM:
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I can't figure out what is wrong with globalism. I keep thinking that anti-globalists are just a modern spin on protectionists. Every time a trade barrier is erected to "protect local businesses", they reward inefficiency and allow locals to gouge each other. They kill the competition that people would have to face if there were no barriers. They are basically throwing in the towel, saying they can't compete *and* have high standards of living, so they attempt to eliminate competition. The foreign countries who are suffering are suffering because they have to keep their costs at inhumane levels just to have a chance to compete. Remove the trade barriers, and the costs should rise again. Any restrictions are contradicting the idea that market forces would balance each other out without that help.

Ethics is the measuring of morality. Morality is the measuring of good. Good is the measuring of benefit. Benefit is the measure of values.
Fried Egg
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Posted 12/19/08 - 06:56 AM:
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keda wrote:
Wherever I go, free market seems to be taken to be connected with globalism. I am myself opposed to globalism yet advocate a free market, and have my reasons for doing so and find it hard to grasp why other free-marketters be for globalism, so can anyone explain why this is the case?
While I'm not against globalism in general i.e. I don't think it is inherently wrong, I am against the current trend of globalism, since it harms people (workers and local business) who were never asked to participate in trade agreements not to mention that the trade agreements are not free trade but managed trade, and thirdly trading with countries that are less free causes outsourcing and lowers the economic freedom to the lowest common denominator so to speak.

It sounds like you are saying that you are in favour of globalism in principle but no as it is currently practiced. One might say the same of capitalism.

However it is an interesting question. Can there be economic integration without political integration? Ludwig Von Mises, in "Bureaucracy" wrote:

The equilibrium in the distribution of powers between the Federal Government and the States as established by the Constitution has been seriously disturbed because the new powers that the authorities acquired for the most part accrued to the Union and not to the States. This is not the effect of sinister machinations on the part of mysterious Washington cliques, eager to curb the States and to establish centralization. It is the consequence of the fact of the fact that the United States is an economic unit with a uniform monetary and credit system with free mobility of commodities, capital, and men among the States. In such a country, government control of business must be centralized. It would be out of the question to leave it to the individual States. If each State were free to control business according to its own plans, the unity of the domestic market would disintegrate. State control of business would be practicable only if every State were in a position to separate its territory from the rest of the nation by trade and migration barriers and an autonomous monetary and credit policy.

From this we might conclude that economic integration leads ineoxerably to political unity. Thus it would be hypocritical or at least counter productive to push for economic integration (gloablisation) whilst opposing political integration (international laws and government).
keda
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Posted 12/19/08 - 07:50 AM:
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I'm not talking about protectionism or trade barriers. I'm talking about trade agreements. The local businesses and wages must be protected against trade deals that are being forced down their throats, only benefitting big international corporations. I'm suggesting that these sort of things should only go through through a process of negotiation rather than through force.

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keda
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Posted 12/19/08 - 08:11 AM:
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Fried Egg wrote:

It sounds like you are saying that you are in favour of globalism in principle but no as it is currently practiced.

I would say that I could be in favour of a slow process of globalization that is done through consent, but I'm not sure how it could be accomplished. All I know is that in the current scheme it is being done through force and that it is spreading cronyism over the world. It may just be because each government is more or less corrupt and are just puppets of these corporations.

From this we might conclude that economic integration leads ineoxerably to political unity. Thus it would be hypocritical or at least counter productive to push for economic integration (gloablisation) whilst opposing political integration (international laws and government).

I would say that as long as each participant have a free market on their own, they can be unified without such problems, since the governments do not interfer in the market. In any case even with two free markets uniting into a common market, it can be harmful to people who have made investments in a way that such investments become bad investments after the unification, and the solution would be that these people who would suffer from the unification have to be compensated through negotiating with those who would profit from an unification.

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Buddahchuck
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Posted 12/19/08 - 08:56 AM:
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Certainly we don't want restrictions on our markets until it comes down to things like monkey paws and rhino tusks. I mean, it always seems like a good idea to be able to trade everything freely, without barriers until we find out that little girls are being sold as prostitutes. And of course, we could always say that this is not a free market, for certainly individuals traded in such a scheme are not free, but that is merely to belie the point that when people are allowed to trade everything freely, some people will have objections to the fact that those things are allowed to be traded at all. I guess this is the bleaker side of fair trade.

As for globalization, I think the main reason why it is seen as necessary for a free market is to ensure that said restrictions are not capable of being enforced ensuring some sort of world-wide trading laws that will necessitate a balance. Because China makes everything so cheaply, Western cultures are having to revamp their production methods so that they can compete.

I do, however, agree with keda that globalization, they way it is undertaken today, is not a viable means for obtaining a free market. Rather, it should be the other way around. Markets should be so free that they become global. But I consider both free markets and globalization, while they both have good goals, impractical in society today. Until economy is about something other than money, then I don't think things will work.

What we need is the Santa Clause economy where a bunch of playful elves make a bunch of goods so that a big fat guy can ride around the world and deliver them.
dgp
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Posted 12/19/08 - 05:51 PM:
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Many times people argue two sides of the same cause simply because of a difference definitions. Or they overlay the meanings and blur the distinctions. "Free market" economies get lumped with merchantist greed. "Outsourcing" is defined as lost jobs. "Rights" are confused with entitlements. Nailing down the meaning is, in some cases, half the battle.

A free global market does not imply that all laws are abandoned -- the sanctioning of human trading and abused. Most civilized countries have sensible laws concerning the human condition. If Ivory trading is illegal, then it is just as illegal in a free market. When it really comes down to it, most arguments for "leveling the playing field" are simply attempts by business to derive an advantage through law.

As for "outsourcing", it too gets a bad rap. Do we really want to produce plastic McDonalds toys and clock radios. And would it really hurt to loose these jobs? I do find it frustrating when I call a support line and get another country on the phone, however these businesses are simply looking to cut the costs in order to stay competitive. "Outsourcing" can also help a business lower its manpower costs and allow them to adapt more rapidly to a changing economic environment. An outsourced job is still a job on the books, unemployment numbers don't change.

"Dumping" is also a big bug-a-boo. Many businesses call foul just to try and get an edge. Any company that is selling below the market value is, in fact, losing money. And you don't stay in business by losing money. And if indeed they can stay in business while "dumping" then they simply have a more efficient production system. The argument goes that these countries running sweat shops can under cut the price, yet in business, you get what you pay for. A mass of unskilled labors in poor working conditions can't produce as well as, or have the same work incentitves as, other well treated workers. That is not to say that the boycott of a company with questionable working conditions would be against the philosophy of "Free Markets". Boycott them.

I think the main thing that concerns me about "Globalization" is "Centralization". As the saying goes, "Power corrupts and absolute power corrupts absolutely". My thought is to always work on keeping the power from building in any one place whether it be State Government, Federal Government, Big Corporations, Unions, Associations or other joint affair like the UN. That is why the founding fathers of the United States wanted to insure State's Rights over the Federal Govenment.

dgp

Edited by dgp on 12/19/08 - 05:59 PM

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Dr. Tyko Glas
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Posted 12/19/08 - 06:14 PM:
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keda wrote:
I am myself opposed to globalism yet advocate a free market...

This is a moronic conclusion that will dissolve the more you study either economics or politics. Give it time.

(1) Globalization is the basic premise for any economy, and (2) markets are "free" as long as they don't hurt the region's socio-political stability.

Regulation, high taxing, and protectionism remain as the most common features of so-called "free markets."

Edited by Dr. Tyko Glas on 12/19/08 - 06:35 PM

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swstephe
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Posted 12/19/08 - 10:37 PM:
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keda wrote:
I'm not talking about protectionism or trade barriers. I'm talking about trade agreements. The local businesses and wages must be protected against trade deals that are being forced down their throats, only benefitting big international corporations. I'm suggesting that these sort of things should only go through through a process of negotiation rather than through force.


Isn't that just the other side of the coin? It sure sounds like protectionism to me. There were tariffs, quotas and preferences already in place which protected local businesses. It was the consumer who was "forced" to be gouged or "gold bricked", by local businesses. Trade agreements are actually forcing the local businesses to compete, fairly, on a global market. If a business and wages are hurt, it is because they are simply too expensive. Allowing free trade will bring those prices down, make local businesses more competitive in the long run, and allow quality and safety to control the market rather than nationalism and racism. I've been part of a few international businesses. They often find out that their jump to cut expenses by outsourcing had even more serious consequences.

One boss I knew told how a German car manufacturer started making cars in South Africa. At first, they saved a lot of money, for about the same quality, even justifying the cost of shipping the cars back to Europe. Eventually, the South African factories got organized, demanded higher wages, and drove up their expenses until manufacturing back in Germany was much cheaper again. He told this story due to our constant complaints about the quality of work given by our outsourced development group. There were major culture clashes and misfires on expectations and work ethics. I've personally had to troubleshoot a project that had been "fixed" by one outsourced Indian group. I was able to repair a lot of the damage, but the end user was already dissatisfied and the company ended up with an $8 million failure.

As a consumer, why shouldn't I expect the businesses I buy things from to compete fairly against the competition? Should I be happy to accept trade barriers that allow local businesses to gouge me? I think people in previously protected countries need to accept the fact that local businesses will be unable to compete for a while, salaries will go down, until everything is equalized again.

Ethics is the measuring of morality. Morality is the measuring of good. Good is the measuring of benefit. Benefit is the measure of values.
keda
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Posted 12/20/08 - 04:10 AM:
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Again, I'm not talking about trade barriers, protectionism, tariffs etc. These terms make sense only given existing markets, and I would agree that they do harm. You say that trade agreements are forced upon local business to compete, which is however another form of harm. They are not fair, since they were not asked to participate in such a deal.

Lowering prices is not necessarily a good thing. Slave labour in prisons force down prices on products as well as wages making it impossible to compete without lowering wages. Its simply not possible to compete with a slave without working like a slave. The same can be said about imported Chinese slave goods which hurt both workers and local business. You see once you add an element of force in the market, it is no longer fair competition, but a rigged game, in favour of those who rigged the game. It goes under the name of corporatism. Look it up. From this can be derived the notion that the economic freedoms will be lowered in the long run toward the "lowest common denominator", as the harms of regulations in each country can spread to others and compounds on one another, globalizing slavery. This is why I can only support a unification of two free markets.





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Free Europe Now How to fix your country
In thought, men distance themselves from nature in order thus imaginatively to present it to themselves--but only in order to determine how it is to be dominated - Adorno and Horkheimer
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